5 Income All-Stars That Have Paid Dividends For Over 100 Years

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Includes: AEP, CL, CLX, ED, GIS, JNJ, KO, MDLZ, PEP, PG
by: Stock Croc

These five stocks are the only ones that can boast the following:

  1. Yields in excess of 2.5 percent
  2. Uninterrupted payment histories of over one hundred years
  3. Increased dividend payments every year, consecutively, over a period of decades (with the exception of WWI and WWII restrictions).

General Electric (NYSE:GE) and Clorox (NYSE:CLX) would have made the cut had they been able to keep up their consecutive dividend growth, and, in the case of GE, not cut the dividend. I examine the five stocks' valuations to see how they hold up to their competitors:

The Coca-Cola Company (NYSE:KO) – This global beverage leader is currently trading near $68 a share. It has ranged from $60.30 to $71.77 over the past 52 weeks. Its dividend yield is 2.8 percent or $1.88. Earnings per share is $5.44, and price to earnings ratio is 12.60. Market capitalization is $155.59 billion.

KO’s payout ratio is 34 percent. It is included on the list of “U.S. Dividend Champions” having increased its dividend every year for the past 49 years. Its share price has performed moderately. A $1,000 purchase made ten years ago would have purchased 20.35 shares for $49.14. The investment would have increased 39.91 percent to $1399.06 today. $1,000 purchased 20 years ago would have increased 333.73 percent to $4337.34, adjusted for a 4:1 split factor.

KO reported strong third quarter results. Worldwide volume growth was 5 percent for the quarter. Net revenue was up 45 percent, and operating income was up 17 percent.

Pepsico, Inc. (NYSE:PEP) is currently trading near $63 a share, which is in the middle of its 52-week range of $58.50 to $71.89. Its dividend yield is 3.30 percent or $2.06. Earnings per share is $3.99, and price to earnings ratio is 15.74. Market capitalization is $98.15 billion.

PEP is also a U.S. Dividend Champion, having increased its dividend every year for the past 39 years. Its payout ratio is 50 percent. A $1,000 investment made ten years ago would be worth $1,291.17 today, a 29.12 percent increase. The same investment made 20 years ago would be worth $4,531.89 today.

PEP also reported strong third quarter results. Worldwide snacks volume grew 8 percent, and beverage volume grew 4 percent. Net revenue increased 9 percent. Reported net income grew 4 percent.

The KO/PEP debate rages on. Based on share price, PEP is a little cheaper, and its yield and dividend are slightly higher. Management pays out more of its earnings to shareholders, but its price relative to earnings is a little higher. Historic price trends do not account for dividend reinvestment, so the comparisons are limited, though PEP comes out slightly ahead. KO is a fine investment, though. Investors can always buy a little of each.

General Mills Inc. (NYSE:GIS) – This consumer food products manufacturer is currently trading near $39 a share. It has ranged from $33.11 to $39.77 over the past 52 weeks. Its dividend yield is 3.10 percent or $1.22. Earnings per share is $2.61, and price to earnings ratio is 15.04. Market Capitalization is $25.25 billion.

Its payout ratio is 44 percent. Though it boasts an uninterrupted dividend payment history, it is not a Dividend Champion, or one that has increased dividends for at least the past 25 consecutive years. A $1,000 investment made ten years ago would be worth $1,750.61 today, an increase of 75.06 percent.

GIS reported quarterly results on Sept. 21 for its first fiscal quarter of 2012. The company acquired a controlling interest in Yoplait yogurt, and financial statements include one month of Yoplait’s results. Net sales grew by 9 percent. Cash from operating activities increased year over year to $441 million. Company officials expect GIS to post growth in earnings through the rest of the year, with the rate of growth improving as the year unfolds.

Kraft Foods Inc. (KFT) is currently trading near $35 a share. It has ranged from $29.80 to $36.30 over the past 52 weeks. Its dividend yield is 3.30 percent or $1.16. Earnings per share is $1.75, and price to earnings ratio is 20.27. Market capitalization is $62.64 billion.

Payout ratio is 67 percent. It is not a “Dividend Champion” either. A $1,000 investment ten years ago would be worth $1034.11 today, an increase of 3.41 percent.

KFT’s quarterly results are due out Nov. 2.

GIS’s ten-year performance is better. Its dividend track record is strong, performance is solid, and outlook is optimistic.

Procter & Gamble Co. (NYSE:PG) – This manufacturer of beauty products, men’s personal care products, healthcare products, snacks and pet food, and more is currently trading near $65 a share. It has ranged from $57.56 to $67.72 over the past 52 weeks. Its dividend yield is 3.30 percent or $2.10. Earnings per share is $3.93, and price to earnings ratio is 16.57. Market capitalization is $178.93 billion.

Payout ratio is 50 percent. PG is a Dividend Champion, having increased its dividend for 55 consecutive years. An investment of $1000 made ten years ago would now be worth $1775.60, an increase of 77.56 percent.

Fiscal first quarter results were strong. Net sales increased 9 percent and was broad based, showing growth in all six business segments. Operating margin was down because gross margin was down from higher commodity costs.

Johnson & Johnson Inc. (NYSE:JNJ) is currently trading near $65 a share. It has ranged in price from $57.50 to $68.05 over the past 52 weeks. Its dividend yield is 3.6 percent or $2.28. Earnings per share is $4.10, and price to earnings ratio is 15.93. Market capitalization is $178.95 billion.

Payout ratio is 54 percent. JNJ is a Dividend Champion that has increased its dividend every year for the past 49 years. An investment of $1000 made ten years ago would now be worth $1402.67, an increase of 40.63 percent.

JNJ posted strong third quarter results. Sales increased 6.8 percent to $16 billion. Operational results increased 2.6 percent.

Both of these stocks are strong performers in income portfolios, but PG seems to be the better performer at this time.

Consolidated Edison, Inc. (NYSE:ED) – This energy services provider is currently trading near $60 a share, at the very high end of its 52-week range of $47.51 to $59.89. Its dividend yield is 4.10 percent or $2.40. Earnings per share is $3.64, and price to earnings ratio is 16.38. Market capitalization is $17.47 billion.

Payout ratio is 66 percent. ED, also a Dividend Champion, has increased its dividend for the past 37 consecutive years. $1000 invested ten years ago would have grown by 49.06 percent to $1490.63.

ED’s third quarter results will be released Monday. Revenue is expected to be up 7.4 percent year over year.

Its competitor, American Electric Power (NYSE:AEP) is currently trading near $40, which is at the higher end of its 52-week range of $33.09 to $40.00. Its dividend yield is 4.80 percent or $1.84. Earnings per share is $2.99, and price to earnings ratio is 13.28. Market capitalization is $19.15 billion.

Payout ratio is 60 percent. AEP is not among the Dividend Champions, but its dividend payment record dates to 1927. Share price ten years ago was $42.83.

ED has earned its reputation as an all-star and has a place in every income portfolio.

Colgate Palmolive Company (NYSE:CL) – This consumer products manufacturer is currently trading near $91 a share. It has ranged from $74.39 to $94.89 over the past 52 weeks. Dividend yield is 2.60 or $2.32 percent. Earnings per share is $4.88, and price to earnings ratio is 18.66. Market capitalization is $44.31 percent.

Payout ratio is 45 percent. It has increased its dividend payout for the past 48 years. An investment of about $1000 made ten years ago would have purchased 17 shares at a price of $958.46. It would be worth $1552.61 today, an increase in 61.99 percent.

Third quarter results were strong, with net sales totaling $4.38 billion, a year-over-year increase of 11 percent. Gross profit margin was 56.2 percent, which is down 320 basis points year over year due to raw and packaging materials costs increasing worldwide. Operating profit was $1.04 billion, an increase of 8 percent.

The Clorox Company (CLX) is currently trading near $66 a share, which is in the middle of its 52-week range of $60.57 to $75.44. Its dividend yield is 3.60 percent or $2.40. Earnings per share is $4.03, and price to earnings ratio is 16.44. Market capitalization is $8.7 billion.

Its payout ratio is 55 percent. Another Dividend Champion, CLX has increased its dividend for the past 34 consecutive years. $1000 invested ten years ago would have bought 27 shares. Today, the investment would be worth $1820.61, and 82.74 percent increase.

CLX reported fiscal fourth quarter and year-end results for the period ended June 30 in early August. Highlights include improved quarterly net earnings and gross margin. Quarterly net earnings were $170 million, or 8 percent year over year. Gross margin of 45.8 percent showed an increase of 370 basis points over the same quarter in 2010.

Both of these companies are very good investments for long-term income investors. The both boast strong payment histories, commitments to shareholders, and sold results despite challenging economic conditions.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.